律齐文化(00550) - 2025 - 年度业绩

Annual Performance Overview Financial Summary The company's FY2024 revenue decreased 13.3% YoY to HK$31.5 million and gross profit fell 10.5% to HK$18.2 million, yet the annual loss narrowed significantly by 65.5% to HK$12.5 million due to cost controls, with the Board resolving not to declare a final dividend Key Financial Metrics for FY2024 | Metric | 2024 (HK$ thousands) | 2023 (HK$ thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 31,500 | 36,332 | -13.3% | | Gross Profit | 18,200 | 20,341 | -10.5% | | Loss for the year | 12,500 | 36,238 | -65.5% | | Loss for the year attributable to equity holders of the Company | 12,500 | 35,934 | -65.2% | - The Board of Directors resolved not to recommend the payment of any dividend for the year ended December 31, 2024[3] Consolidated Financial Statements The financial statements show a significant reduction in the 2024 loss, driven by lower administrative expenses and a reversal of impairment on trade receivables, while total assets and equity halved due to a sharp decline in the value of equity instruments at FVOCI Consolidated Statement of Profit or Loss and Other Comprehensive Income The company's 2024 loss narrowed to HK$12.5 million from HK$36.2 million in the prior year, mainly due to reduced administrative expenses and a reversal of impairment on trade receivables, with basic loss per share improving to 2.75 HK cents Key Items from the Consolidated Statement of Profit or Loss (For the year ended December 31) | Item (HK$ thousands) | 2024 | 2023 | Reason for Change | | :--- | :--- | :--- | :--- | | Revenue | 31,515 | 36,332 | Cessation of non-advertising businesses | | Gross Profit | 18,202 | 20,341 | Decreased revenue | | Administrative expenses | (23,524) | (34,840) | Reduced staff costs | | Impairment (reversal)/losses on trade receivables | 1,743 | (6,162) | Reversal of impairment | | Loss for the year | (12,494) | (36,238) | Significant narrowing of loss | | Basic loss per share | (2.75 HK cents) | (7.90 HK cents) | - | Consolidated Statement of Financial Position Total assets as of year-end 2024 decreased by 47% to HK$65.8 million, primarily driven by a sharp fall in 'equity instruments at FVOCI' within non-current assets, causing net assets to decline from HK$114.3 million to HK$52.3 million Key Items from the Consolidated Statement of Financial Position (As at December 31) | Item (HK$ thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Non-current assets | 22,852 | 84,927 | | Including: Equity instruments at FVOCI | 128 | 59,625 | | Current assets | 42,989 | 39,371 | | Including: Cash and cash equivalents | 37,042 | 30,081 | | Total assets | 65,841 | 124,298 | | Net assets | 52,268 | 114,305 | | Total equity | 52,268 | 114,305 | Notes to the Consolidated Financial Statements General Information and Accounting Policies The company is an investment holding company engaged in advertising, healthcare products, e-commerce, and IP development, with financial statements prepared under HKFRSs and the adoption of new standards having no material impact - The Group is principally engaged in (i) provision of advertising services; (ii) sales of medical and healthcare products; (iii) e-commerce business; and (iv) provision of intellectual property (IP) development and design services[9] - The application of new and revised Hong Kong Financial Reporting Standards in the current year has had no material effect on the Group's financial performance and position[11] Segment Information The company's business structure changed significantly in 2024, with all revenue of HK$31.5 million generated from the advertising services segment, reflecting a strategic focus shift away from other now-dormant segments Segment Revenue Analysis (HK$ thousands) | Business Segment | 2024 Revenue | 2023 Revenue | | :--- | :--- | :--- | | Advertising services | 31,515 | 32,483 | | Sales of medical and healthcare products | – | 373 | | E-commerce business | – | 2,900 | | IP development and design services | – | 576 | | Total | 31,515 | 36,332 | - In 2024, the advertising services segment reported a profit of HK$1.3 million, while the e-commerce and IP development segments recorded minor losses[15] - Geographically, revenue in 2024 was primarily from Hong Kong (HK$23.9 million) and Mainland China (HK$7.6 million), whereas all 2023 revenue was from Hong Kong[17] Notes on Key Financial Items This section details financial data, including a loss of approximately HK$186,000 from the disposal of three subsidiaries in 2024, higher finance costs from lease liabilities, and a decrease in impairment provisions for trade receivables, with no dividend recommended - In 2024, the Group completed the disposal of the entire equity interests in three subsidiaries, Glory Novel Limited, Beyond Noble Holdings Limited, and Smart Path Enterprises Limited, resulting in a total loss of approximately HK$186,000[22][51] - The impairment provision for trade receivables decreased from HK$4.6 million in 2023 to HK$2.9 million in 2024, with a reversal of impairment loss of HK$1.7 million during the year[30] - The Board does not recommend the payment of a dividend for the years ended December 31, 2024 and 2023[27] Independent Auditor's Report The independent auditor issued a Disclaimer of Opinion on the consolidated financial statements for the year ended December 31, 2024, due to the inability to obtain sufficient appropriate audit evidence regarding key items, indicating material uncertainty about the report's reliability Basis for Disclaimer of Opinion The disclaimer is based on scope limitations concerning the investment in an associate, the unverifiable opening balances and comparative figures from the prior year's disclaimer, and the unconfirmed loss on disposal of subsidiaries due to lack of access to records - The auditor issued a "Disclaimer of Opinion" on the company's consolidated financial statements for the year 2024[34] - Scope Limitation on Interest in an Associate: The auditor was unable to obtain the audited financial statements of the associate, Aolorry, and thus could not determine the share of results or any potential impairment[35][36] - Issue with Opening Balances and Corresponding Figures: Due to the disclaimer of opinion on the 2023 financial statements, the opening balances and comparative figures for 2024 could not be verified[38] - Scope Limitation on Loss on Disposal of Subsidiaries: The auditor could not obtain the books and records of the disposed subsidiaries (Jingji Tianzi and Haotuo), preventing confirmation of the accuracy of the reported loss on disposal[39] Management Discussion and Analysis Financial Review Total revenue in 2024 fell 13.3% to HK$31.5 million due to the cessation of non-advertising businesses, but the pre-tax loss narrowed by 65.5% to HK$12.5 million, driven by a 32.5% reduction in administrative expenses and a stable gross margin of 57.8% - Revenue decreased by 13.3% to HK$31.5 million, primarily due to the cessation of businesses outside the advertising segment (especially the e-commerce segment)[41] Gross Profit and Gross Profit Margin | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Gross Profit (HK$ thousands) | 18,202 | 20,341 | | Gross Profit Margin (%) | 57.8% | 56.0% | - Administrative expenses decreased by 32.5% from HK$34.8 million to HK$23.5 million, mainly due to reduced staff costs[50] - Loss before income tax decreased by 65.5% from HK$36.2 million to HK$12.5 million[53] Business Review The core advertising business showed resilience amid economic challenges, with the company expanding into Mainland China to offset a 26.5% decline in its Hong Kong Recruit magazine revenue, while other business segments were discontinued due to operational issues - The core advertising business, Recruit magazine, faced structural challenges, with advertising revenue decreasing by 26.5% year-on-year to HK$23.9 million[56] - The company actively expanded its digital advertising business in Mainland China, with subsidiary Shenzhen Lvqi contributing approximately HK$5.1 million in revenue through platforms like Douyin, and cooperation with affiliate Shenzhen Jingji bringing in about HK$2.5 million[57][58] - Due to the failure of a former executive director to properly hand over documents, the medical and healthcare products, e-commerce, and IP development and design services segments have ceased developing new business and are being gradually deconsolidated or sold[59] Future Prospects The company will focus on its core advertising competencies by strengthening its Hong Kong multi-platform business, expanding digital advertising solutions in Mainland China, and vertically integrating its event management services with a new factory - Consolidate the core advertising business by leveraging Recruit magazine's multi-platform reach across print, website, app, and social media[62] - Actively explore advertising opportunities in Mainland China, particularly by providing advertising solutions for clients on digital platforms like Douyin[62] - Expand promotion services and event management to Mainland China and establish an in-house factory (expected to operate in July 2025) to produce event props, achieving vertical integration and improving cost-effectiveness[64][65] Liquidity and Financial Resources The Group maintained a sound financial position at year-end 2024 with net current assets of approximately HK$30.7 million, a current ratio of 4.5, increased cash balances of HK$37.0 million, and no bank borrowings Liquidity Ratios (As at December 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net Current Assets (HK$) | ~30,700,000 | ~30,700,000 | | Current Ratio | 4.5 | 4.5 | | Cash and Bank Balances (HK$) | ~37,000,000 | ~30,000,000 | | Bank Loans and Other Borrowings | None | None | Other Important Matters Events After the Reporting Period Subsequent to the reporting period, the company completed the disposal of its entire interest in associate Aolorry for HK$9.95 million and is currently involved in several legal proceedings, including actions concerning a former director - In May 2025, the company disposed of its entire investment interest in its associate, Aolorry, for a consideration of HK$9.95 million[72] - The company is pursuing legal action against a former director and his controlled entities, seeking damages for breach of fiduciary duties[73] - A shareholder has filed a lawsuit against the company alleging defamatory statements in a published announcement, which the company is defending[75] Material Acquisitions and Disposals On December 23, 2024, the company entered into agreements to dispose of two subsidiaries, Beyond Noble and Smart Path, for considerations of HK$19,000 and HK$1 respectively - On December 23, 2024, the company agreed to sell the entire issued share capital of Beyond Noble for a consideration of HK$19,000[78] - On the same day, the company agreed to sell the entire issued share capital of Smart Path for a consideration of HK$1[78] Other Material Events The company faces significant challenges, including a continued suspension of trading since April 2, 2024, and is working to fulfill the Stock Exchange's resumption guidance by conducting investigations and reviews - Trading in the company's shares has been suspended on the Stock Exchange since April 2, 2024, and will remain so until the resumption guidance is fulfilled[81][99] - The Stock Exchange has issued resumption guidance, requiring the company to complete an independent forensic investigation, demonstrate management integrity, conduct an internal control review, and publish all outstanding financial results[83] - The company changed its auditor in May 2024, appointing BDO Limited as the new auditor[82][86] - The company has engaged independent third parties to conduct an investigation into audit-related matters and an independent review of its internal control procedures to satisfy the resumption guidance[87] Corporate Governance The company is committed to maintaining high standards of corporate governance, has complied with the Corporate Governance Code, and its Audit Committee has reviewed the annual results - The company has complied with the applicable code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules[89] - The Audit Committee has reviewed the annual results for the year ended December 31, 2024[92]